J&J, McKesson, Cardinal, AmerisourceBergen near $26B opioid settlement

The country's three largest drug distributors and Johnson & Johnson are expected to announce this week a $26 billion settlement to resolve thousands of opioid lawsuits from states, cities and Native American tribes, The New York Times reported July 20. 

But the agreement, which involves McKesson, AmerisourceBergen and Cardinal Health along with Johnson & Johnson, could still fall apart or have significant changes, several people with knowledge of the matter told the Times

This is the closest the yearslong legal battle — considered one of the most complex civil lawsuits in modern history — has come to reaching an end, The Washington Post reported. States and local governments that agree to the settlement cannot file any more civil lawsuits against the companies regarding the opioid crisis. But the companies and their executives could still face criminal charges, according to the Post

The thousands of lawsuits accuse the drug companies of failing to flag and halt suspicious orders of opioid pills delivered to communities around the U.S. Distributors have argued that their job is to make sure medication prescribed by licensed physicians and dispensed by pharmacies are available to patients, the Post reported. 

The settlement would resolve the ongoing litigation as well as future lawsuits filed by states, cities, counties, Native American tribes and other jurisdictions against the drugmaker and distributors. If agreed to, the settlement could set aside funds for the governments as soon as the end of September, the Post reported. 

As part of the settlement, the drug distributors would have to pay for a clearinghouse to share information about their shipments of controlled substances for a decade. They would also be required to alert state regulators about suspicious orders and customers turned away because of concerns about their controls for controlled substances, according to the Post

Johnson and Johnson would pay $3.7 billion in the first three years after the settlement and $1.3 billion over the next six years, the Times reported. McKesson, AmerisourceBergen and Cardinal Health would pay $21 billion over 17 years. 

The settlement also requires the money to be spent on opioid abatement strategies, such as naloxone and recovery services, opioid use disorder treatments and other resources, including care for babies born with neonatal abstinence syndrome and preventive measures for overprescribing. 

The agreement appears to have backing from more than 40 states, the Times reported. 

Johnson & Johnson told the Times: "There continues to be progress toward finalizing this agreement, and we remain committed to providing certainty for involved parties and critical assistance for families and communities in need. The settlement is not an admission of liability or wrongdoing, and the company will continue to defend against any litigation that the final agreement does not resolve."

Cardinal Health declined to comment to the Times, and the other distributors didn't respond to requests for comment. 

New York Attorney General Letitia James announced July 20 that the three distributors agreed to pay $1.1 billion to resolve the state's opioid litigation, part of the overall $26 billion plan, the Times reported. It is the only deal that has been formally agreed to so far. 

Opioid overdose deaths have claimed more than 500,000 lives since 1999, according to the Post. An estimated 69,710 Americans died of opioid overdoses in 2020. The opioid epidemic is estimated to have cost the U.S. more than $1 trillion between 2001 and 2017, according to a study cited by the Post

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